First IRS Revenue Ruling of 2008 liberalizes S Corp health insurance

Notice 2008-1 The IRS has released its first Revenue Ruling for the year 2008, which provides clarification for rules that allow a 2%-shareholder/employee to deduct accident and health insurance premiums. Accident and health insurance premiums paid or furnished by an S corporation on behalf of its 2-percent shareholders in consideration for services rendered are treated for income tax purposes like partnership guaranteed payments.